Executives recently revealed that sales of the K-Cups "had
double-digit negatives" last quarter. That compares with a 14%
sales increase for Keurig Green Mountain K-Cups.

Dunkin' Donuts' ineffective strategy is to blame.

"Unlike competitors such as Starbucks that sell K-cups through
multiple channels, Dunkin' sells its pods only in its
restaurants, not in grocery and other mass retail outlets,"
Wong writes.

Executives fear that if Dunkin' offers coffee in grocery and
convenience stores, people will brew it at home instead of coming
to restaurants. Overall comparable-store sales increased by 1.4%
in the quarter, but would have increased by 2% without the K-Cup
decline.

Sales of
single-serving coffee pods have been soaring in recent years
because customers like the options for convenience and
customization.

This year, Keurig launched a machine that also allows customers
to brew up to 30 ounces of coffee at once.

While the invention was touted as the next George Foreman Grill,
consumers were furious that their old K-Cups didn't work in the
new machine.

The machines are RFID-limited, meaning only items with a Keurig
code work. This restricts consumers from buying coffee pods from
other brands.